Space ventures struggling in a dot-com worldSome companies aiming for new goals after setbacks

SEATTLE, Nov. 18  No bucks, no Buck Rogers. Twenty years after
that observation on the realities underlying space flight first surfaced in
The Right Stuff, rocket entrepreneur Gary Hudson quotes it anew
to explain why its harder for space ventures to get off the ground in
an Internet age.

WE DONT
need any more technology, Hudson, president and chief executive officer
of Rotary Rocket, told scores of space enthusiasts at a Space Enterprise Symposium
in Seattle last weekend. Weve got lots.

Rather, the lack
of bucks is the key problem facing not only Hudsons company, but dozens
of other small ventures trying to stake a claim on the final frontier. And in
his view  a view shared by many of the other groups seeking investments
 one of the big factors has to do with the Internet gold rush.

The dot-coms
have hijacked the institutional funding markets, he complained. It was
a sorry commentary, he said, when the second quarters biggest
Bay Area investment went to a company that distributes pet food on the
Internet  an apparent reference to San Francisco-based Petopia.com.

Internet-related
companies took in almost 60 percent of the venture capital doled out in 1999s
third quarter, according to the PricewaterhouseCoopers Money Tree Survey. But
Hudson and other rocket executives acknowledge that there are deeper reasons
why the revolution in commercial space hasnt happened yet.

Many of the companies
developing new launch vehicles had pinned their hopes on a seeming boom in satellite-based
telecommunications. In recent months, however, that boom has gone bust: It turned
out the consumer appetite for anytime, anywhere communications
wasnt as strong as expected, leading the Motorola-led Iridium satellite
venture to file for bankruptcy protection in August.

Debt woes also
have bedeviled ICO Global Communications, which is in the process of being bailed
out by telecom magnate Craig McCaw and two of his affiliated companies, Teledesic
and Eagle River Investments.

All this has caused
investors to question the wisdom of investing in companies associated with building
low-Earth-orbit satellite networks.

That was
the target market for all of us at one time, said said Mike Kelly, chairman
and chief technology officer of Kelly Space and Technology.

Iridiums setback has caused us fits, he said. We have been associated
with that failure.